Additional information regarding the state of Rutgers Athletics’ finances was recently uncovered following an analysis conducted by The Record and NorthJersey.com.
The report found that Rutgers Athletics currently faces an unpaid debt of around $ 265 million, nearly half of which is associated with the operating costs of the Big Ten conference alone, according to the article.
In an effort to cover these expenses, Rutgers himself loaned the track program $ 84 million over the past six years from his internal bank. The Athletics Department reported these loans as revenue, which not only violated NCAA University policies and guidelines, but also incorrectly displayed the department’s revenue and budget deficit, according to the Department of Athletics. ‘article.
“It’s unsustainable, but I don’t have an answer as to what’s sustainable going forward,” University president Jonathan Holloway said of internal lending, according to the article.
The University’s official policy was updated in June to allow internal loans for operating deficits, after receiving requests from The Record and NorthJersey.com, according to the article.
J. Michael Gower, chief financial officer and treasurer, said the policy change has been underway since 2020. Although any department can now take out an internal loan to cover operating costs, Gower said the athletics was the only department to take out such a loan. .
The sports department also took about $ 48 million in loans from the Big Ten Conference and used about $ 25 million in tax credits to help cover the costs of building new facilities. Rutgers was unable to provide a copy of his Big Ten Conference contract to The Record and NorthJersey.com, saying they do not have a copy themselves.
Rebecca Givan, president of the American Association of Rutgers University Teachers and the American Federation of Teachers, said the university’s actions raised concerns about its accounting practices and financial reporting. She said she didn’t know why the University did this, but thought it didn’t sound like honest bookkeeping.
“The other problem is just to hide the true size of spending on athletics,” she said. “If it is appropriate to spend so much money on athletics beyond the income generated by the sport, then they should be open and honest about it… rather than having loans from other parts of the world. the University. “
The money used to fund internal loans comes from different areas of University funding, including tuition fees and student fees. Givan said that by doing this, the University was using its students and employees to subsidize and pay for the athletics program without any transparency.
Rutgers Athletics relies on support from the University more than any of the 52 public universities in the five richest conferences, with each New Brunswick campus student paying around $ 400 in fees for athletics alone, according to the ‘article.
Additionally, Rutgers was ranked last among those universities in athletics donations for 2019-2020 operations, 50th in revenue generated and 51st in ticket sales from 2019-2020, according to the article.
Despite these rankings, the University has continued to rely in part on donations for construction projects, such as the two new sports buildings, which total around $ 150 million, according to the article. Donations for these projects covered only about a third of the price.
The financial state of the program has only been worsened by the coronavirus disease (COVID-19) pandemic, which has led the University to fill tens of millions of dollars in the shortfall, according to the article. The precise amount is currently not known because the University refused to reveal this information.
However, Givan said based on the financial documents, this behavior has been a trend for the University for some time, with aspects such as the large spending gap and subsidies hidden long before the pandemic.
“All other University programs, from libraries to individual academic departments, are advised that they must cover their own costs,” Givan said. “And athletics is apparently being told that even if they are missing tens of millions of dollars, the rest of the University will subsidize their costs. They won’t be subjected to the kind of painful cuts everyone is familiar with at Rutgers.